The governor's $25,000 club

Jeffrey Meitrodt, Ray Long and John ChaseTribune staff reporters

Gov. Rod Blagojevich's aggressive fundraising machine collected hundreds of $25,000 checks in a campaign effort that dwarfed his predecessors', and most of these big givers ended up benefiting from his administration.

A Tribune examination of all 235 of those donations shows that three of every four came from individuals, companies or interest groups who got something -- from lucrative state contracts to coveted state board appointments to favorable policy and regulatory actions.Donors interviewed said they gave to show their support for the first Democratic governor in a quarter-century or to get the attention of the new regime. But the Tribune found a pattern that raises new questions about possible links between campaign donations and government actions.

Blagojevich insiders have been accused in a wide-ranging federal corruption investigation of exchanging favors for contributions. Last week, a former agency director admitted in a plea agreement that he bought his job in part with two $25,000 donations.

While campaigning as a reformer who would end Illinois' "pay-to-play" reputation, Blagojevich relied heavily on donors with a stake in his administration. He proposed a cap on campaign contributions but has done little to pass the proposal.

Illinois is one of just five states with no limits on campaign contributions. Most states prohibit individuals or companies from giving as much as $25,000 to political candidates, according to the National Conference of State Legislatures.

A spokeswoman for the governor flatly denied any suggestion that Blagojevich traded favors for donations, as did an official with the governor's campaign fund, Friends of Blagojevich.

"Absolutely not," Doug Scofield, a top campaign adviser, wrote in an e-mail response to written questions.

"There is no connection between campaign contributions and the awarding of contracts or jobs," he said. "The amount of the contribution is a decision made by the contributor alone."

Although there are some contributors who gave even larger amounts, for most the $25,000 -- about the price of a new Toyota Camry -- was their largest political donation ever. Political insiders and fundraisers interviewed acknowledge it was an amount pursued by the campaign from the early stages of Blagojevich's first run for governor.

A Chicago engineering firm and its affiliate wrote two $25,000 checks in 2006, and within months won $25.4 million in new state business. A state lawmaker got a six-figure state job, one of more than four dozen donors awarded jobs or appointments by Blagojevich. One Chicago pharmacist previously told the Tribune -- and law enforcement -- that his $25,000 check to the governor's campaign was the price tag for fixing a critical state audit of his drugstore, an allegation the fundraiser who solicited the check adamantly denies.

Breaking down donations

All told, Blagojevich's campaign has raised more than $58 million since 2000, with nearly $6 million coming in donations of exactly $25,000. Those contributions -- 235 in all -- came from 166 different donors. Those donors gave an additional $8.6 million in amounts larger and smaller than $25,000.

For this report, the Tribune examined all donors who gave Blagojevich at least one $25,000 check, a snapshot of the governor's massive and unprecedented campaign effort.

While Blagojevich has received 235 checks for exactly $25,000, his immediate predecessor, George Ryan -- now in federal prison on corruption charges -- received only 14 since beginning his run for governor. Aides to former Republican Govs. Jim Edgar and James Thompson, who benefited from their own powerful fundraising machines, agreed that $25,000 checks were unusual.

Blagojevich has raised more than any other governor in Illinois history, according to state campaign finance records. It took his GOP predecessor, Ryan, 30 years of campaigning for state offices to raise $40 million.

Of the 235 donations to Blagojevich, the Tribune found 175 came from companies, unions, trade groups or individuals who somehow benefited under his administration. More than three dozen are repeat contributors to political campaigns.

The attorney's case

Chicago attorney Myron Cherry, a longtime supporter of Democratic politicians, sat on Blagojevich's finance committee from the early stages. He said he thought $25,000 was a target sought by the campaign at some fundraising events. Cherry made two $25,000 donations to Blagojevich.

"I remember going to one fundraiser -- there may have been others -- where $25,000 was published as a figure to be a co-host or something," Cherry said. "It was on the invitation."

He said $25,000 is "not an unusual figure in politics," and other amounts were also sought at Blagojevich fundraisers.

"Those of us who had enough money, those of us who wanted to see a change in leadership in this state, $1,000 wasn't going to be enough," he said.

Six months after Cherry's second $25,000 contribution, in June 2004, the state's insurance agency hired his law firm as part of a team to negotiate a multistate legal dispute over alleged fraud by insurance companies.

As part of the $240 million settlement he helped negotiate between the insurance companies and Illinois, Cherry said his firm billed $900,000 in fees. He said he submitted "thousands" of hours and reduced his hourly rate by 40 percent.

Cherry said it is unfair even to suggest his contributions may have been connected to his state business.

"I solicited them for that business," he said. "I solicited several states. I was already involved in pursuing this litigation. It would have been bizarre for the state to choose someone else to pursue litigation that I originated and pitched to them."

'An exclamation point'

Among the many first-time $25,000 donors was a Chicago architectural firm that designed the newly revamped oases on the Illinois Tollway.

John Clark, a principal with Cordogan, Clark & Associates, said that the lead agency on the project, the California firm Wilton Partners, suggested Cordogan, Clark also donate to Blagojevich. Wilton itself donated $50,000 to the governor's campaign fund on the same day. He said Wilton's leaders asked the firm to make the donation as a way to call attention to the oases project, which at the time was moving slowly.

"Giving puts an exclamation point next to your name," Clark said.

After the donation was made, Clark said, the project started to go more smoothly. But he said he wasn't sure that was a direct result of the donation or whether "people were finally getting up to speed."

He said he didn't see the donation as a favor and believes the state was merely living up to the terms of its original agreement signed under the Ryan administration, in which Wilton has spent more than $80 million to renovate the oases and is paid by vendors renting space there.

"Maybe the contribution helped, but I can't say that for sure because it didn't immediately happen," Clark said. "If that's a favor, it isn't much of one."

"If we got anything it was not having to redraw our drawings and [specifications], which were being constrained at a low level [at the Tollway]," he added.

Officials from Wilton Partners did not return phone calls seeking comment. But Clark said Wilton's good work at the Tollway has been overshadowed by unfair allegations of political influence.

Clark's architecture firm was one of 15 donors who gave $25,000 as part of a July 2003 fundraiser at Navy Pier that raised more than $1 million. All but one of the 15 received some benefit from Blagojevich's administration.

Fundraiser's admissions

Among the $25,000 donors at that same fundraiser was Ali Ata, who Blagojevich later picked to become director of the Illinois Finance Authority. Ata pleaded guilty last week to lying to federal agents when he denied his two $25,000 contributions helped get him his $127,000-a-year job. Ata's plea came amid the federal corruption trial of top Blagojevich insider Antoin "Tony" Rezko, who is accused of extorting bribes and campaign contributions from people seeking state business.

According to Ata's plea agreement, Blagojevich spoke with him at that fundraiser. Ata said the governor called him a good supporter, acknowledged that Ata had made his second substantial donation and talked about Ata joining his administration. Ata, now cooperating with federal prosecutors, faces up to 18 months in prison on charges that include lying to investigators about the conversation.

When Ata left his post at the finance authority in 2005 he was replaced by the former executive of a Downstate bank whose parent company also contributed $25,000 to Blagojevich. Jill Rendleman took over as director of the finance authority after two years on its advisory board, a 2003 appointment she received the same month as her parent company's $25,000 donation.

"I don't think the contribution we gave had anything to do with the appointment," said J. Hunt Bonan, vice chairman of the Peoples National Bank board.

Bonan is now the chairman of the board of review for the state Department of Employment Security, a post he also says had nothing to do with his company's 10 donations to Blagojevich totaling $119,000. Still, he acknowledges that donating doesn't hurt in doing business in Illinois, recalling a quote from the late U.S. Sen. Paul Simon, who once said that if he had 20 phone calls waiting for him and he could only call one back, he would pick up the phone for the contributor.

"It does get attention," Bonan said.

Board appointments

In addition to state jobs, the Tribune review revealed that Blagojevich appointed more than 40 of the $25,000 donors or their close relatives or associates to typically unpaid but influential state regulatory boards and commissions.

Blagojevich spokeswoman Rebecca Rausch issued an e-mailed response to appointment questions, saying such decisions are vetted through the governor's office and based on the nominee's qualifications. In response to questions about state contracts, Rausch said: "Strong procurement rules are in place that guide the process of awarding contracts, and it is independent of our office."

Allegations of influence peddling have dogged at least one $25,000 contributor, who also helped raised hundreds of thousands more for Blagojevich.

Harish M. Bhatt, owner of the Basinger's Pharmacy chain based in Joliet, submitted the names of at least two Blagojevich appointees to the state's top pharmacy board and helped the state's top pharmacy regulator win his job. The Tribune reported last year that state pharmacy auditors probing allegations of Medicaid fraud at Basinger's complained their bosses were thwarting the investigation.

Bhatt adamantly denied he exerted any improper influence and said the investigation against him stalled for lack of evidence. State police and federal corruption investigators reopened the Bhatt investigation after Tribune reports.

Bhatt also solicited a $25,000 check from a Chicago pharmacist who was also in trouble with state regulators. The Chicago pharmacist told the Tribune and criminal investigators he made the donation as a form of protection but thought better of it and stopped payment on the check.

State police dismissed the allegations but reopened the case after Tribune inquiries in late 2007. Federal agents are also looking at the allegations.

In the face of such allegations, the governor and his aides have repeatedly emphasized that they don't do business that way.

"We believe the thousands of contributors to Gov. Blagojevich's campaign believe in the things he is fighting for, like making health care more affordable for working families and working to stimulate the economy by passing a jobs bill," Scofield said.

235

Donations of exactly $25,000 given to Gov. Rod Blagojevich since 2000. His predecessor received 14.

75%

Of them came from donors who got some benefit from the state.

For a closer look at some of the biggest contracts, jobs and appointments to state boards, see PAGE 21

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$25,000 donors, their state business

Donor: Patrick Engineering and Albin Carlson

* Dates of $25,000 donations: 5/25/2006 and 6/28/2006

* $25 million in state business

Awarded more than $25.4 million in bid and no-bid contracts with the state tollway and transportation departments within months of the two contributions. All told, the two affiliated companies have earned $52 million in business deals under the Blagojevich administration, but some of those contracts were initiated under Gov. George Ryan.

The companies have contributed more than $345,000 to political candidates, including $86,000 to Blagojevich. They donated a total of $10,000 to former Gov. George Ryan and $2,500 to former Gov. Jim Edgar.

In a written response, company President Daniel Dietzler said his firms never expected anything in return for their donations.

He said his company often donates to candidates "who demonstrate strong leadership and who share values important to Patrick Engineering. We have always supported leaders and we support Gov. Blagojevich because of his commitment to improving infrastructure and, in particular, rebuilding and expanding the tollway system."

Donor: ACS State & Local Solutions

* Date of $25,000 donation: 7/25/2003

* $79 million in contracts

Won a competitively bid state contract worth roughly $15 million per year to oversee the disbursement of child-support checks. The contract, signed with the Gov. George Ryan administration, was finalized under Blagojevich the same month the national consulting firm made the donation. The firm has donated more than $106,000 to political candidates, including $49,087 to Blagojevich. Before Blagojevich took office, ACS received $1.4 million in state business.

An ACS spokesman did not answer specific questions about why the firm made the donations but e-mailed a statement that read, in part: "We contribute to candidates and elected officials (of both parties) who we believe have or will have a positive effect on federal, state and local government."

State officials say ACS turned around the disorganized and ineffective disbursement unit.

Donor: Wight & Co.

* Dates of $25,000 donations: 5/28/2004 and 5/2/2006

* $10 million in contracts

Awarded three no-bid contracts for inspection services and design work with the state Toll Highway Authority after the first of two $25,000 contributions. Mark T. Wight, owner of the company, was also part of a personal real estate deal in 2005 that paid a broker's commission to Blagojevich's wife, Patricia, who owns her own real estate business. Wight sold his condominium for $600,000 to his state lobbyist John Wyma, a longtime Blagojevich insider.

Wight and his companies have contributed more than $600,000 to political candidates since 1994, including $114,000 to Blagojevich. Wight declined to answer specific questions about his donations but has said he is proud of the work his company has done for the state.

Donor: Arthur J. Smith

* Date of $25,000 donation: 6/26/2006

* More than $700,000 in contracts

Won a bid for the largest of several contracts, to do background checks for the Illinois Department of Children and Family Services beginning in 2004. Smith, a leading black entrepreneur in Chicago and owner of Art's Investigations, is also a business partner of longtime Blagojevich fundraiser Antoin "Tony" Rezko. Rezko is on trial on charges he corrupted state boards and improperly wielded influence with the governor.

Smith has given $95,465 to candidates since 1994, including $35,000 to Blagojevich. He declined to comment for this report.

Donor: David Gupta

* Date of $25,000 donation: 7/14/2003

* $106,000 contract

Selected as a subcontractor on a new $18 million, 50,000-square-foot state emergency response headquarters. Gupta's company, System Development Integration, was chosen by the lead contractor on the project after the contract was awarded in 2004.

Gupta has long been a Blagojevich supporter and was quoted in a state report on hiring minority firms that being a "certified company has really helped me get my foot in the door with government contracts that were otherwise inaccessible to us."

A company spokeswoman said Gupta's donation had nothing to do with getting the state work. She said Gupta supported the governor because the governor favors stricter gun control laws.

Gupta and his company have donated a total of $162,395 to political candidates, including $102,425 to Blagojevich.

Donor: Environmental Design International

* Date of $25,000 donation: 6/21/2004

* Contracts worth more than $5 million

Won bid and no-bid contracts for survey, design and inspection work at the tollway and the state Transportation Department after the donation. Deborah Sawyer, owner of the Chicago-based company, was recommended for a Blagojevich appointment to a state board by Rezko, but she did not get the post.

The company has donated more than $129,000 to political candidates since 2001, including $57,500 to Blagojevich. The company declined to discuss the reasons for its donations.

Donor: Former Illinois Rep. Phil Novak (D-Bradley)

* Date of $25,000 donation: 7/9/2002

* $102,800 state appointment

Appointed by the governor to head the Illinois Pollution Control Board on Dec. 1, 2003.

Novak has contributed $61,500 to candidates, including $26,000 to Blagojevich. He raised about $19,000 at a fundraiser he threw for Blagojevich in July 2002 to help his party retake the governor's mansion. Novak denied any connection between his contribution and the board position, a move that boosted his legislative salary and his pension. He retired in 2005.

Tribune reporters David Kidwell and Ray Gibson contributed to this report.